On March 7, 2018, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) granted FERC’s request to stay the issuance of a mandate that would have vacated FERC’s certificate order approving the Southeast Market Pipelines Project (“SMP Project”), a natural gas pipeline currently in service in the southeastern United States. The D.C. Circuit’s order effectively avoids shutdown of the SMP Project while FERC finalizes its supplemental review of the project incorporating its revised environmental analysis. As a result of the D.C. Circuit’s order, FERC now has until March 26, 2018 to issue a new order authorizing the project.

In August 2017, the D.C. Circuit held, among other things, that FERC’s analysis in the final Environmental Impact Statement (“EIS”) for the SMP Project did not meet the requirements of the National Environmental Policy Act (see February 5, 2018 edition of the WER). Specifically, the D.C. Circuit held that FERC failed to include an estimate of the “reasonably foreseeable” downstream greenhouse gas emissions caused by the SMP Project, primarily because all of the natural gas transported through the project is being delivered to natural gas-fired power plants. Accordingly, the D.C. Circuit vacated FERC’s authorization of the SMP Project. In response, FERC and the SMP Project’s sponsors requested an en banc rehearing of the August 2017 decision, which the D.C. Circuit denied on January 31, 2018. Meanwhile, as required by the August 2017 decision, FERC issued a draft supplemental Environmental Impact Statement (“SEIS”) that included an estimate of the SMP Project’s impact on downstream greenhouse gas emissions, and affirmed its earlier determination that the SMP Project would not significantly harm the environment. FERC finalized the SEIS on February 5, 2018.

Because the D.C. Circuit denied en banc review on January 31, 2018, the court was expected to issue a formal mandate requiring FERC to vacate its certificate order for the SMP Project on February 7, 2018. However, on February 6, 2018, FERC requested that the D.C. Circuit stay the mandate for 45 days, until March 26, 2018. In doing so, FERC argued that the mandate would “create a lapse in the Commission-issued certificate authority and effectively cease the operation of needed natural gas pipelines, potentially endangering the supply of electricity to Florida residents.” FERC also explained that it intends to issue a new certificate incorporating its revised environmental analysis before March 26, 2018.

The D.C. Circuit’s one-page order granted FERC’s request for stay until March 26, 2018, while denying a similar request by the SMP Project’s sponsors for a stay for 90 days. As a result, the SMP Project can remain in service while FERC works to issue a new certificate order by March 26, 2018.

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